Question

(You will receive more credit for being “quantitative” with your answers, not just “qualitative”):

The role of government in the U.S. economy has grown over time. Provide some evidence of this fact. Also, the composition of government spending has changed over time. Provide some evidence of this fact.

Answer 1

The US economy is a mixed economy and is highly developed one. According to the nominal GDP it is the worlds largest economy and the US dollar is the most used currency in the international trade. Also it is used as a reserve. The GDP of united states of America is around $ 2019 trillion as of 2017 as is growing with huge numbers. Among the three sectors ie., Agricultural, Manufacturing and Service sector the most contributing one is the service sector whose contribution accounts for almost 80%. The gross averge salary has also increased and rose to around 850$ per week as of 4th quarter of 2017 and the major exporting and importing partners of the UNITED STATES OF AMERICA are the Europian Union,Canada, Mexico, China etc.

The GDP of the UNITED STATES OF AMERICA grew by almost 2% from 2000 till 2017 and is still growing. The welath of USA grew from $ 67000 bn to more than $90,000 bn from 3006 to 2017. Due to lack of non farm jobs the government of USA has made some changes and brought around2 million jobs in non farm jobs to increase the employment rate. The US government is also eliminating the iseless reforms which are not contributing to the economic growth and giving tax benefits to individuals and business entities for yheir prosperity.

Government spending of USA has always been below 20% of GDP But as of 2018 it has reached 21% of GDP and during the tomesof war it reaches around 24-25 % of the GDP. The government spending includes government consumption, investment and expenditures etc. It has some mandatory expenditures like Medical aid, Medicare and social security benefits etc. Almost $3 trillion dollars and it is estimated that by 2030 one in every 5 American will be retired thus it will also lead to rise in government spending. The government spending also includes spending on interest o national debt which is around $360 bn and will get almost double by 2022. Other main expenditures includes expenditure for defence which is around $ 550 bn and will rise in yhe coming future as the trump government wants more safety for the country by building the great wall between US and mexican border.